Traffic Acquisition Cost - TAC

AAA

DEFINITION of 'Traffic Acquisition Cost - TAC'

Payments made by Internet search companies to affiliates and online firms that direct consumer and business traffic to their websites. Traffic acquisition costs (TAC) are a critical cost of revenue for Internet search firms such as Google, Yahoo and Baidu.com. TAC for these firms is watched by investors and analysts to ascertain whether cost of traffic acquisition is rising or declining. Rising TAC has a detrimental effect on profitability.




INVESTOPEDIA EXPLAINS 'Traffic Acquisition Cost - TAC'

Many Internet companies report revenues both on a gross basis, and on a net basis that excludes TAC. One key metric for these companies is TAC as a percentage of advertising and search revenue, with a rising percentage indicating cost pressures on profitability. Sometimes companies will mention payments excluding traffic acquisition costs using ex-TAC.

RELATED TERMS
  1. Baidu

    The dominant Chinese internet search engine company. Baidu offers ...
  2. Consumer Internet Barometer

    A quarterly survey report produced by the Conference Board and ...
  3. Click-Through Rate (CTR)

    The percentage of individuals viewing a web page who click on ...
  4. Banner Advertising

    A rectangular graphic display that stretches across the top or ...
  5. Cyber Monday

    An expression used in online retailing to describe the Monday ...
  6. Viral Marketing

    Internet advertising or marketing that spreads exponentially ...
RELATED FAQS
  1. What is a "phishing scam" and how can they be avoided?

    The term phishing (as in fishing for confidential information) refers to a scam that fraudulently obtains and uses an individual's ... Read Full Answer >>
  2. How can investors influence the c-suite?

    Investors in publicly traded firms can influence C-suite executives by exercising voting rights or engaging in investor activism. ... Read Full Answer >>
  3. What does a merger or acquisition mean for the target company's employees?

    Suppose one sporting goods manufacturer merges with or acquires another sporting goods manufacturer. Before the merger and ... Read Full Answer >>
  4. What is the best reason to pursue a backward integration?

    Saving money on costs and improving efficiency are two good reasons to pursue backward integration. Backward integration ... Read Full Answer >>
  5. Is backward integration the same thing as vertical integration?

    Backward integration is a type of vertical integration, but they are not the same. Vertical integration is the process of ... Read Full Answer >>
  6. How are leveraged buyouts financed?

    A leveraged buyout (LBO) is a transaction in which the buyer borrows a significant portion of the requisite funds to purchase ... Read Full Answer >>
Related Articles
  1. Entrepreneurship

    From The Printing Press To The Internet

    Find out how this invention contributed to the development and evolution of the U.S. economy.
  2. Options & Futures

    10 Tips For Choosing An Online Broker

    This important investment decision happens before you pick your first stock. Find out how to get it right.
  3. Personal Finance

    Avoiding Online Investment Scams

    Find out how to spot internet fraud and protect your hard-earned money.
  4. Personal Finance

    Tips For Keeping Your Financial Data Safe Online

    Find out how to protect your personal information from phishers, scammers and thieves.
  5. Fundamental Analysis

    Explaining Enterprise Multiple

    The enterprise multiple is a ratio used to value a company as if it was going to be acquired.
  6. Chart Advisor

    3 Basic Material Stocks Poised For A Pop

    After large market swings such as the one seen on March 30, 2015, it is not surprising to see traders become more tolerant towards taking on risk.
  7. Stock Analysis

    Will Kraft-Heinz Be a Winner?

    Kraft and Heinz are now one. This should present a profitable long-term investment opportunity, but isn't likely to be smooth sailing at first.
  8. Investing

    WhatsApp: The Best Facebook Purchase Ever?

    WhatsApp is Facebook's largest acquisition to date. What makes it worth the major price tag?
  9. Fundamental Analysis

    Private vs Public Equity: What's Best?

    What is the better way for a company to attract investors; by making its stock available for sale to whoever wants some, or by petitioning rich people?
  10. Investing News

    Sun Pharma And Ranbaxy: An Ideal Pharma Marriage?

    The Sun Pharma merger with Ranbaxy will blend the complementary market strengths and areas of expertise of each company and create a powerful pharma force.

You May Also Like

Hot Definitions
  1. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  2. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  3. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  4. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  5. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  6. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
Trading Center